MOSCOW (MRC) -- Asian petrochemicals markets are likely to remain bearish in the week ahead amid new plant startups, lackluster downstream demand and a supply glut in some of the markets, reported S&P Global.
In benzene, the impending startup of new refineries across the Asian region, namely Zhejiang Petrochemical, Hengyi Refinery and Petronas' RAPID, are expected to produce on-specification benzene by December 2019-January 2020, adding 1.54 million mt of supply to the Asian market and contributing to the weak sentiment going forward. While operations are unlikely to run at full capacities, the additional supply would displace exports at a time when US demand may be thin.
Meanwhile, the Asian styrene market is likely to be weak to stable as many participants will be away from the market, attending an industry conference in Guiyang. Bearish market sentiment is expected to persist this week unless demand picks up and bolsters prices.
Asian purified terephthalic acid prices are expected to come under pressure this week amid bearish sentiment. Even though immediate PTA demand is healthy in China, with downstream polyester producers keeping operations at a rate of around 90%, buying interest is expected to slow down soon as the traditional polyester peak season would have ended by end-October, market sources said.
Meanwhile, market participants are trading "based on expectations", especially in PTA futures listed on the Zhengzhou Commodity Exchange, which weighs on physical spot PTA prices, market sources said. In plant news, China's Yisheng Petrochemical has shut its 2.2 million mt/year No.4 unit at Ningbo over the weekend as well due to PX shortage for a couple of days, a source close to the company said Monday. Two other sources told S&P Global Platts that the duration of the shutdown is expected to last for three to four days. China's Hengli Petrochemical plans to shut its 2.2 million mt/year No.2 PTA unit at Dalian for around 10-12 days of maintenance on the October 26th, a source familiar with the matter said.
PTA is used to produce polyethylene terephthalate (PET), which is used in the manufacturing of plastic bottles, films, packaging containers, in the textile and food industries.
According to MRC's DataScope report, Chinese bottle grade PET deliveries to Russia increased 34% in the first eight months of 2019 to 95,600 tonnes. China accounted for 90% of the total imports, compared to 85% a year earlier.
August imports of material from China decreased by 41% to 7,600 tonnes from 12,800 tonnes in July. Jiangsu Sanfangxiang, Yisheng, Wankai and Sinopec were the leading Chinese suppliersof material to the Russian market.